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Report Says Canada's Housing Boom Continues
¡¾2002.06.7¡¿

Source from Canada's Press.

According to a report by Statistics Canada, the value of proposed residential building permits reached an all-time high last month, proving again the housing boom is far from over.

But there are fears the condo market, responsible for much of the increase, could be getting overheated.

Statistics Canada said building permits for multiple dwellings, which includes condominiums and apartments, rose 40.3 per cent from last month.

Andrew Pyle, senior financial economist with the Bank of Nova Scotia said, "all of the (housing) increase came from the condo market, as multiple unit permits rose 40.3 per cent and 80 per cent of the increase came from Toronto.

"The risk is that, like the late-80s, multiple unit construction is starting to look overdone and may leave the sector vulnerable to another shock to North American demand".

Craig Wright, chief economist with the Royal Bank of Canada said, "residential construction will be a strong upward influence on (second-quarter) GDP growth".

Statistics Canada said municipalities issued $2.6 billion in housing permits in April, a 10.1 per cent jump from March and an improvement on the record set in February".

"The numbers have been really high since the beginning of the year. It's mortgage rates, they're still advantageous", said Etienne St. Pierre, an analyst with Statistics Canada.

Residential intentions are practically carrying the construction industry. Builders took out only $1.2 billion in non-residential permits, the lowest level since February, 2000.

Paul Morse, vice president of office leasing for Royal LePage Commercial Inc., said, "we were seeing this slowdown 12 months ago. We need a period of corporate profitability before (construction) returns".

The only strength in commercial construction is in the industrial record, which recorded a 62.8 per cent gain from a month earlier.

The outlook was less positive for the hospitality and office sectors. This sector fell so far in April that it pulled all commercial intentions down by 9.8 per cent from the month before, to $629-million.

Despite the lean times in non-residential construction, the total value of permits hit its highest level since August 1989. Of the $3.9 billion in permits in April, residential construction accounted for almost two-thirds.